Keywords Studios expects profit after tax to be up 55% this year

Dublin-founded video games specialist Keywords Studios has said its profit after tax will be up 55 per cent this year as it benefited from a reduction in certain costs due to the Covid-19 pandemic.

In a trading update for the year ending December 31st, 2021, published on Monday, the group said it continued to perform well in the second half of the year following the strong performance in the first half.

Demand for its services was driven by the “buoyant video games market” and the industry’s focus on new content creation.

“We have continued to benefit from a reduction in certain costs due to Covid-19, primarily relating to remote working, property costs, travel and business development,” it said.

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The board now expects that full-year revenue for 2021 will be at least €505 million, which represents 35 per cent year-on-year growth.

Adjusted profit before tax will be in excess of €85 million, which represents 55 per cent year-on-year growth. Both metrics are ahead of current analysts’ consensus forecasts.

“We expect this trading momentum to continue into 2022, giving us confidence in delivering 2022 revenue at the upper end of current analysts’ consensus forecasts,” the group said.

“We continue to expect adjusted profit before tax margins to moderate towards our historical levels of 15 per cent, as certain costs return with the easing of restrictions and as we continue to invest in the platform and our people.”

The group will provide a further update with its scheduled trading update at the end of January 2022.

Keywords Studios chief executive Bertrand Bodson said the company “continues to perform strongly, driven by high levels of demand for our services, as we grow our capabilities, reach and scale.

“Having started to meet with many of our people, studios and customers, I am excited about the opportunity to capitalise on the group’s unique full service platform to deliver an ever more compelling proposition for the buoyant video games market, and adjacent content industries.

“I have been impressed by the ambitious team at Keywords, which is highly driven to continue to build on the group’s successful organic and acquisitive growth track record.”